Australian inflation rate takes a leap upward

By
David Solomon, Special to The Christian Science Monitor /
February 5, 1982

Canberra

Australia's inflation rate jumped by 4.2 percent in the December quarter of 1981, bringing the annual total rate to 11.3 percent.

About 2 percent of the increase was due to federal government decisions taken in the budget last August. These measures included a 10.2 percent growth in government support for health services under a new tax-sharing plan between the federal government and the states and northern territories. There was also a hike of 21/2 percent in sales tax rates.

Treasurer John Howard attributed the increase to ''special factors'' and predicted a drop back to single digit inflation.

Most other officials were more pessimistic. George Polites, a spokesman for the National Employers Organization, warned that unless there was some slowing in wage demands Australia would be ''staring in the face'' of an inflation rate of up to 15 percent. This would be on top of an unemployment rate of 7 to 8 percent. (The present jobless rate is about 6 percent.)

In recent months, trade unions have been getting wage rises of 10 to 15 percent for their members, but the higher inflation rate is certain to touch off new demands.

The pay increases granted so far have not yet been fed into the inflation rate.

The March quarter figures will reflect January increases in steel prices as well as in the cost of bread and milk products.

Opposition Labor Party leader William G. Hayden said the rise took Australia's inflation rate higher than the average for countries in the Organization for Economic Cooperation and Development.

He said the government could not blame anyone else for its abysmal inflation record. He defended unions and families, saying they were simply battling to maintain living standards in the face of ''savage tax battering.''